Friday, September 28, 2012

A recent study put together by The Javelin Group
has some disturbing findings: The incidence of identity theft in 2012 was up 13
percent, compared to the previous year. The total amount stolen was about the
same, but the thieves successfully scammed more people.

Facebook, Google+ and LinkedIn users take heed:
The study found that there were specific factors that put social media users at
elevated risk of getting scammed:

68 percent of social media users publicly shared
their birthday.

63 percent shared the name of their high school.

18 percent shared their phone number.

12 percent shared their pet's name.

All of the above information represents the
kinds of things a company would use to verify your identity, according to the
study's authors. In some cases, scammers have been known to bluff their way
through customer service representatives to get access to other important
information - and even wipe out entire accounts. When young or vulnerable
people share this information, it could make them more susceptible to stalkers
or sexual predators.

The
Smartphone Factor

The study also found that smartphone users were
a third more likely to be victims of identity theft than non-smartphone users.
This doesn't mean, necessarily, that smartphones are to blame. But it does seem
to indicate that the people who use smartphones are doing something to make
them more vulnerable or attractive to scammers.

What can you do to avoid being a victim?

Password protect your phone.

Don't use credit cards for Internet transactions
over public networks. Thieves have "sniffers" that can extract
that data.

Use different passwords for mobile banking apps
on your phone than passwords you do for your phone and email.

Promptly report any suspicion that your
sensitive personal information has been compromised.

Keep documents that list Social Security numbers
off of your laptop, or encrypt that data if you do store there.

Keep private information private. If any company
uses specific information about you to verify your identity - your
mothers' maiden name, pet names, birthdays, etc., keep it off Facebook and
any other social media site.

Tip:

Is your mother on your Facebook page? Does she
use her maiden name? You are vulnerable.

Pro tip: If your mother is on your Facebook
page, and you share your date of birth, you are a prime candidate for ID theft.

Thursday, September 20, 2012

Want to preserve more of your money while
decreasing your exposure to tax? The best way to do that is by strategically
planning how you withdraw money from your tax-deferred accounts like your
401K’s or Traditional IRA’s.

For most accounts - including savings
accounts and investment portfolios - you are required to pay taxes during the
year that you receive income (from interest or dividends, for example). But
with a tax-deferred account, you put off the payable tax until you withdraw the
money from your account. You're not taxed on the money you've earned in the
account. Instead, you're taxed on the money you take out of it.

A savvy accountholder will time their
withdrawals to reduce the amount of tax they owe and thus increase the amount
of money they get to keep. They do this by withdrawing money during a year when
their income is low (such as during a period of unemployment or retirement).
This puts them into a lower tax bracket so they pay less tax on their
withdrawals.

Compare this to someone who is earning six
figures and withdraws money from their tax-deferred account. Because they are
already in a higher tax bracket, their withdrawal adds more money to their
taxable income.

The only time to consider taking the higher
taxes is when you can put that money to work in an investment that will earn
back far more than you expect to lose from the added tax. But, there are times
when we don’t have a choice in taking money out of our retirement accounts. I
am referring to the Required Minimum Distribution.

With a Traditional IRA or a 401K, one thing
to consider is that at one point in your future, you will have to start taking
money out of your retirement fund. This is referred to as the RMD or Required
Minimum Distribution. Uncle Sam will not allow us to keep our money earning
deferred interest forever! He giveth the tax deferred account and he taketh
away our taxes. How? At age 70.5, or seventy and a half, you will be required
to take a minimum amount out of your retirement accounts on an annual basis regardless
of whether you are retired. How is that amount calculated? Well, the best way to
find out your minimum distribution would be to check on IRS Publication 590, “individual
Retirement Arrangements” (hard) or
you can contact your IRA custodian/administrator and ask them (easy). The RMD rules also are enforced
for other retirement plans such as the 403B, SEP IRA’s, and Basic Retirement
Plans. Each has very specific rules so contact your retirement
custodian/administrator and ask them about your specific situation.

You work hard for your money and saving for
the future in a tax-deferred account is smart. Protect your wealth and reduce
the taxes you owe by making sure your withdrawals coincide with times when you
are in a lower tax bracket.

* * *

Our next Financial Education Workshop will be taking place
in our main office next week:

Sept. 26th
6:30pm – Credit
Myths and Repair – Learn the top ten myths of credit management, how to
access your credit report for free, and how to address information on your
reports that is inaccurate, invalid, or out of date. Thousands of South Bay
residents have benefitted from this workshop over the past five years. Please
contact me to RSVP for the workshop. Gmeyer@meriwest.com
or 408-365-6328.

Thursday, September 13, 2012

Preventing ID Theft is not difficult. Some may have you
think that you have to see your credit report on a daily basis to be safe. They
appeal to the very paranoid among us with offers of free 24/7 access to your
credit report for a nominal monthly fee. Does 24/7 access to your credit report
really prevent ID Theft? NO. It does not prevent anything. It does not stop
anyone from using your credit card number. It does not stop computer hackers
from accessing your PC through the internet. It does not stop anyone from
stealing your wallet and using your identity.

Being able to view your credit report on a daily basis only
gives you warning AFTER someone has committed an identity crime. By the time an
identity thief has built a credit account in your name and it has posted on
your credit report, the damage is already done. At that point you need to file
a complaint with your credit card issuer and file a fraud hold with the credit
reporting agencies.

There are some things that are very difficult or even
impossible for you to prevent, such as a hacker accessing your personal data
from a third party’s files or if someone placed a debit/credit card skimmer at
your favorite gas station or market. Both of these issues have happened to me.
I have been hacked and skimmed. In both instances, I found out at least 60 days
after the fact. That’s an awful long time for someone to have my data and,
luckily, nothing happened. My financial institution took action as soon as they
knew about it and cancelled and replaced my Debit Card each time. Not everyone
is as lucky as I was.

Some of the best ID Theft prevention can be done right in
your own home. Having solid anti virus protection and a good internet firewall
solves a myriad of issues. For a lot of people, the firewall that is included
in Windows does the job. If you are an “at risk” websurfer, meaning you wander
off the regular beaten internet pathways, you might want to have something
stronger than the Windows version. There are a lot of good commercial firewalls
and anti virus programs available and some can be had for free.

A lot of ID theft happens when someone’s wallet or purse is
stolen. Even in a paperless world, there are a lot of important papers and
cards in our wallets and purses. How do we protect our cards if our wallet is
taken? One simple fix is to take a permanent marker and write, “Ask for ID” in
big block letters on the back of all of our credit and debit cards. Not all
clerks at check out counters will check identification, but with this on the
back of your card, you will see an increase in the number of stores that ask
for it.

If you are notified of an ID Theft situation on your cards
where your personal info is compromised or suspect it has happened, you can
take some actions to prevent further losses. The first thing is to check your
credit report for any recent activities that might indicate someone has your
information. Go to WWW.AnnualCreditReport.com
to access a copy of your credit report from all three credit bureaus. Check
each report for suspicious entries. If you don’t see anything but still suspect
something may come up in the near future, please contact the three major credit
bureaus and place a 90 day Fraud Alert on your account.

Make sure the bureaus have your proper contact data. If
anyone tries to use your credit in the next 90 days without your knowledge, you
will be contacted by your bureau to verify the credit inquiry. If you did not
initiate the inquiry, you can stop it immediately and authorities will be
notified of the fraud.

You can also place a “Credit Freeze” on your account. A
“Credit Freeze” is another tool the bureaus have to prevent ID Theft. For more
detailed info on what a “Credit Freeze” does and how it can be placed in your
state, please check this link here
from The Consumers’ Union.

***

Our next Financial Education Workshops will be taking place
in our main office this month.

Sept. 19th
6:30pm – Teen
Reality Based Budgets – Help your teenager or young adult learn how to
create and manage a personal expense budget. This is a “life after college”
simulation. Please contact me to RSVP for the workshop. Gmeyer@meriwest.com or 408-365-6328.

Sept. 26th
6:30pm – Credit
Myths and Repair – Learn the top ten myths of credit management, how to
access your credit report for free, and how to address information on your
reports that is inaccurate, invalid, or out of date. Thousands of South Bay
residents have benefitted from this workshop over the past five years. Please
contact me to RSVP for the workshop. Gmeyer@meriwest.com
or 408-365-6328.

Friday, September 7, 2012

Business
owners have special needs when it comes to their business checking account.
When one is opening a new business or considering a change in financial
institutions, it pays to look beyond the standard commercial bank and do some
extra research on a type of financial institution that has been around for
years, the credit union. Here at Meriwest Credit Union we have been involved in
business banking and lending for many years.

There are a
number of questions that must be asked when you are vetting a new home for your
business checking account. How will you use your checking account? Will you be
writing checks or using online banking to pay bills and vendors? Using online
resources can save you some money with some institutions. Are you able to
designate people, such as a bookkeeper, and give them a personal secure log in
account to do business or transact inquiries on the account?

What are
the monthly fees and how do you get them reversed or cancelled? Is there a
minimum balance requirement? Can that requirement be met by depositing funds in
a savings/money market account?

Does the
bank offer overdraft protection? This is often a deal breaker for a lot of
business people. The best sort of overdraft protection is a line of credit
associated with the account where dollars are transferred off the line of
credit should a deposit need to be made when a check is clearing. Some
institutions will allow you to overdraft the account slightly, while charging a
significant overdraft fee of $35 or higher. The worst is what I refer to as a
“Call and a Prayer Overdraft Protection;” the bank calls you to tell you that
checks are clearing and you pray you make it to the bank on time to make the
deposit for them to clear. This is very stressful and very expensive as they
will charge you to pay those items provided you make it to the office to make
the deposit on time. If you don’t make it, your checks will be returned and
your time was wasted.

More
questions business owners should ask about a prospective financial institution:
How convenient are the offices? Can you bank electronically? What are their
hours? Do they open Saturdays?

An
important aspect of this is the customer service the institution gives you.
When you walk in to get information, are you recognized right away as a new
client and greeted? Or are you ignored? Does the sales person strive to give
you a complete run down of the information you need to make your decision or do
they shove brochures at you? Does the staff appear to be well informed and
competent or slightly confused and embarrassed by it? You can tell a lot about
an institution from walking in on a Friday night an hour before closing and
watching the flow of customers. Observe the tellers, are they competently going
about their work or does a supervisor have to help with their transactions? Are
customers in line pleasantly waiting or impatient? Impatience may be a signal
that long waits in the teller line are common in that institution.

A few years
ago, credit unions started offering business accounts to small businesses in
their communities. Among the advantages of a credit union over a bank is the
concept of shared banking. A business owner can go to any shared branch of any
credit union across the country and make a deposit to an account at their
credit union. Another advantage is that credit unions typically have fewer fees
and those fees that are charged are often less than their bank competitors.

A business
owner’s time is precious. It is important they spend a bit of time examining
and shopping institutions they may be considering for their banking. This way
they can save a lot of money, time and hassle in the future.

Meriwest
Credit Union does offer a free business checking account. See our Business
Banking link here
to view our checking account offers for small business owners.